U.S. unemployment aid applications plummet to 346K

Associated Press

Job seekers wait in line to talk with prospective employers at the Edison Career Fair in Woodbridge Township, N.J., Feb. 26.

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WASHINGTON (AP) – The number of Americans seeking U.S. unemployment benefits fell sharply last week to a seasonally adjusted 346,000, suggesting March’s weak month of hiring may be a temporary slowdown.

Weekly unemployment aid applications dropped by 42,000 last week, the Labor Department said Thursday. The steep decline reversed sharp gains over the previous two weeks and brought the level back to a point that signals stronger job growth.

The four-week average, a less volatile measure, rose 3,000 to 358,000.

The data have been volatile in the past two weeks largely because of the Easter holiday, a department spokesman says. The timing of the holiday changes from year to year. That makes it difficult to adjust for school holidays that can cause temporary layoffs.

Employers added only 88,000 jobs in March after averaging 220,000 the previous four months.

The unemployment rate fell to a four-year low of 7.6 percent last month, down from 7.7 percent in February. However, the rate fell only because more people stopped looking for work and were no longer counted as unemployed.

Applications are a proxy for layoffs. Any decline in applications would signal that companies are laying off fewer workers.

Still, layoffs are only half of the equation. Businesses also need to be confident enough in the economic outlook to add more jobs.

Economists predict that economic growth accelerated in the January-March quarter to an annual rate of 3 percent. That would be a vast improvement from the rate of 0.4 percent in the October-December, which was held by steep defense cuts and slower restocking.

One concern is that across-the-board government spending cuts that began on March 1 will shave a half-percentage point from growth this year. That may have also made businesses cautious about hiring last month.